Sunday, May 05, 2024
Business leaders have urged the government to formulate an exit policy for non-willful defaulters as such businessmen, who contribute to the national exchequer by paying corporate tax, VAT and duties, but face identical challenges and harassment similar to willful defaulters.
Criticising advance income tax for increasing corporate tax, the leaders urged the government to either adjust AIT, or just withdraw it altogether.
They made these remarks at the 44th meeting of the National Board of Revenue (NBR) Consultative Committee, organised by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and NBR on the National Budget 2024-25 at a city hotel on Thursday.
Moreover, the FBCCI urged the government to raise the tax-free income limit to Tk 4.5 lakh for individuals, taking into consideration the ongoing skyrocketing inflation, and real wage of low-income groups; and increase tax-free income limit to Tk 5 lakh for women and senior citizens.
Addressing the programme, Bangladesh Textile Mills Association (BTMA) President Mohammad Ali Khokon said, “We are unwell. There is a scarcity of gas and electricity. The interest rate has gone up from single digit to double digit, and there is an EDF problem.
“It is now difficult for us to do business.”
The Bangladesh Bank has increased the lending rate to 13.55 per cent. As a result, the production cost of the business has risen. However, the businessmen are suffering from open letters of credit (LC) due to the USD shortage in the country.
Khokon pointed out, “We have focused on how to boost the ease of doing business, but the businessmen are not getting loans from banks due to increased default loans in the banking sector.
“A group of people with influence took out loans from banks, but did not pay back. So, the banks are suffering from a liquidity crisis.”
He continued, “Do not mix looters’ money with us. Punish them if someone loots, but if our business is closed, the country will not earn foreign currency. So please make an exit policy for genuine traders.
“The Backward linkage industry is also not doing well.”
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Executive President Mohammad Hatem said, “Bangladesh's taxation system is contradictory to business and investment.
“If the AIT is not adjusted, then the corporate tax is no longer at 12 per cent. It has gone up. Even if the deputy commissioner of taxes disallows expenditure in the corporate tax, it still goes up to 30 per cent. So, either stop taking the AIT, or introduce an adjustment policy.”
He then said, “The fines in all cases of imports and exports have gone to intolerable levels because incentives are being introduced for officials. So, some officials are hurting our exports and fining us exorbitantly.
“Banks are dealing with the USD crisis. We open letters of credit (LCs) at Tk 125 per USD. On the other hand, we get a Tk 110 in export proceeds. Our business is suffering due to the defaulters. So the central bank should take necessary steps as soon as possible. Many factories have already stopped their production due to heavy losses.”
Dhaka Chamber of Commerce & Industry President Ashraf Ahmed said, “There have been many changes in the last five years. But we are not getting benefits for some changes. Instead, some of these changes are harmful for the business community.
“Earlier, the AIT had adjustments, but this is not the case now. In the upcoming budget, AIT adjustment should be done.”
Real Estate and Housing Association of Bangladesh (REHAB) President Md Wahiduzzaman urged the government to reduce registration tax of flats and lands, as well as proposing that the opportunity to whiten black money be given in the upcoming budget.
Bangladesh Dokan Malik Samity President Md Helal Uddin said, “Officials are taking VAT on tagged prices, not discounted prices. However, most products are sold at a discounted rate.”
381 proposals of FBCCI
The FBCCI presented a written proposal of 381 for the upcoming budget for FY25, which includes income tax, VAT and customs issues, as well as revenue administrative reforms.
Presenting a short version of the proposal, FBCCI President Mahbubul Alam said, “Although the national economy is currently on solid grounds, we must advance the pace of our economic development by addressing the LDC graduation challenges.
“This must be done despite the long-term adverse effects of post-Covid 19 and the ongoing Russia-Ukraine war and the Middle East crisis. For this, it has become necessary to strengthen the business-friendly environment of Bangladesh. The government will be able to collect its desired revenue only if the economy runs at the right pace.”
He added, “To strengthen the position of Bangladesh in the global competitiveness index, it is crucial to reduce the cost of doing business, protect investment, increase the capacity of ports, ensure a balanced investment, supportive currency, and customs management, and reduce all types of transportation costs including shipping costs, electricity and fuel.
Besides ensuring transparency and good governance in infrastructure development, the FBCCI president called for special priority in the next budget to ensure business-friendly tax management, by eliminating harassment and complications in the tax collection process.
State Minister of Finance Waseqa Ayesha Khan said, “It is high time to reduce our anti-export bias. If the price is high in the country’s local market, it will not be exported. So how will we bring foreign currency?”
‘Nobody will be left behind’
“Tax Ombudsmen are needed in the country, and attention needs to be given to various exemptions and rationalisations ahead of the country’s LDC graduation.”
Attending as the chief guest, Finance Minister Abul Hassan Mahmood Ali said, “We will consider these thoughtful statements. The government will always listen to your words. The prime minister wants to hear everyone's speech and wants to ensure everyone’s rights.
“Nobody will be left behind.”
Presiding over the event, NBR Chairman Abu Hena Md Rahmatul Muneem said, “The NBR’s aim is to ensure ease of doing business. Our goal is to support you. Most of your dissatisfactions are personal. So talk to the commissioner about your complaints, dissatisfactions.
“We will compile your written statement and we will consider reasonable proposals.”
